Study: Banks Lag on Internet, Intranet Use

The banking industry's use of the private computer networks known as intranets lags that of other business sectors, according to a study from Business Research Group.

However, the study indicates that by the end of this year banks plan to acquire intranet servers at faster than most other industries.

"Financial institutions haven't jumped on the intranet as fast as other corporations, but they are ramping up and going forward at a faster rate," said Joyce L. Becknell, author of a recent study on intranets for the Boston-based Business Research Group.

Intranets are private computer networks designed to give corporate employees an Internet-like medium for accessing and exchanging information. The same browser software used to find information on the Internet can be applied to intranets.

However, unlike the Internet, which is a vast, free-form public network, intranets have firewalls that prevent unauthorized people from using them.

According to the Business Research Group study of about 300 companies in various industries, the percentage of U.S. corporations using intranets has doubled in the past six months to 27%. Analysts expect another doubling by year's end.

Only about 21% of the surveyed banking and financial companies have built intranets. That comes as little surprise, given that only 17% of the banks polled provide desktop Internet access to their employees, compared with 41% of all companies.

Although 31% of the banks had established sites on the Internet's World Wide Web, about 47% of the companies in the survey had done so.

By yearend, banks plan to acquire more computers to support intranets than many other industries, including manufacturing, health care, and entertainment, the study reported.

At the moment, most corporate intranets are private sections of the corporate Web site mainly used by employees. But over the next four years, customers increasingly will be given access, said Thomas J. Pincince of Forrester Research, based in Cambridge, Mass.

"The thing that makes the intranet powerful is that I can see my account and run applications on it without having to have a bank employee as an intermediary," said Mr. Pincince, author of a report called "The Full Service Intranet."

Intranets also can improve internal functions, such as routing information from one corporate department to another.

One obstacle to banks' use of the intranets is the heavy investment that many have made in proprietary networks based on software such as Lotus Notes. About 40% of the banks in the Business Research Group's study used Notes, compared with only 25% of the total sample.

Experts said proprietary networks and intranets are likely to coexist for most companies over the next several years.

They added that streamlining business functions such as human resources and order entry will be among the first widespread applications for intranets.

Though banks could benefit from these early applications, experts said the true payback for intranets is likely to come when more bank technology providers begin to make banking-specific applications.

Some providers already have begun. Last month Unisys Corp. and Information Discovery Inc. launched a service that recognizes patterns in bank data and turns those patterns into English sentences and graphics.

The service, based on software called Intra/Knowledge, will then include the text and graphics in a series of articles in a "newspaper" available on the bank's intranet.

Versions of the on-line newspaper are tailored to the needs of users. For example, marketing people in the bank's western region will see different items from branch managers in an eastern region.

Unisys is talking with American Express and several of the nation's top 15 banks about using the technology, said David McKeever, director of financial services for Unisys, based in Blue Bell, Pa.

"The idea is to tell the untold stories within the data base," added Kamram Parsaye, chief executive officer of San Diego-based Information Discovery.

"The newspaper paradigm was natural when we thought about how groups of users could access and digest this knowledge."

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